COURT FILE NO.: CV-19-00623482-0000
DATE: 20201217
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ALLSTATE INSURANCE COMPANY OF CANADA
Applicant (Respondent)
– and –
TD HOME & AUTO INSURANCE COMPANY
Respondent (Appellant)
Eric K. Grossman, lawyer for the Applicant (Respondent)
M. Huclack, lawyer for the Respondent (Appellant)
HEARD: NOVEMBER 12, 2020
G. DOW, J.
REASONS FOR DECISION
[1] This matter comes before the court pursuant to the provisions of an Arbitration Agreement entered into between the parties dated May 1, 2019. The subject matter of the dispute between these two Ontario motor vehicle insurers is the payment of automobile accident benefits to Dustin Grondin. Mr. Grondin was injured in a motor vehicle accident on May 25, 2015. Dustin Grondin was operating a vehicle leased by his fiancée, insured by Allstate Insurance Company of Canada (“Allstate”), while northbound on Highway 23 north of Ellsworth Road in Michigan.
[2] Dustin Grondin also owned a motor vehicle which he insured with TD Home & Auto Insurance Company (“TD Home”). Both Dustin Grondin and his fiancée had resided together in Sault Ste. Marie, Ontario for a number of years. That is, Dustin Grondin had access to at least two Ontario standard automobile policies for accident benefits under the Statutory Accident Benefits Schedule (“SABS”).
[3] On or about June 14, 2015 Allstate received a completed Application for Accident Benefits (OCF-1) from Dustin Grondin. It also received a form in which Dustin Grondin elected to receive the accident benefits available in the jurisdiction where the accident occurred. That election is provided for under Section 59 of the SABS. At this time, Michigan’s Personal Injury Protection (“PIP”) benefits were more generous than Ontario’s SABS.
[4] On July 3, 2015 Allstate disputed that it was the proper (or priority) insurer to pay accident benefits and forwarded its Notice to Applicant of Dispute Between Insurers to Dustin Grondin and TD Home as required. That form provides 14 days for the insured to object to the transfer of the claim to another insurer and participate in the proceeding. Dustin Grondin did not object.
[5] TD Home reviewed the situation and accepted priority by letter dated September 17, 2015. Allstate sought reimbursement of the amounts it had paid. In response, TD Home reimbursed Allstate for the Ontario level benefits paid which was $39,384.44 less than the Michigan level PIP benefits that Allstate had paid to Dustin Grondin.
[6] Allstate sought recovery of that additional amount, interest, legal expenses and the costs of the arbitration in the private arbitration which followed and was successful. TD Home, pursuant to Section 7 of the Arbitration Agreement appeals to this court.
[7] It was not disputed before me by TD Home that Allstate was obligated to pay Michigan PIP benefits to Dustin Grondin given the application of Section 59 of the SABS. That section, particularly subsection 59(4) allows for the recovery of the benefits available in the jurisdiction in which the accident happened where certain conditions are met, the key one being under subsection 59(4)(b), “the criteria prescribed for recovery under the law of the jurisdiction in which the accident occurred”.
[8] Michigan has a No Fault Certification List available for insurers to sign confirming they will pay Michigan level benefits. Allstate signed that list. It may or may not have been a condition of an Allstate related company selling motor vehicle insurance in that state. TD Home had not signed the Certification List and does not sell motor vehicle insurance in Michigan. TD Home accepted Allstate’s obligation to pay Dustin Grondin Michigan level PIP benefits on that basis.
[9] TD Home submits subsection 59(4) of the SABS invites a review of Michigan law which excludes the obligation to pay Michigan level PIP benefits under Section 500.3113(c) of Michigan’s motor vehicle insurance legislation. That subsection denies PIP benefits to persons “not resident in the state of Michigan”. That is, the obligation for an Ontario insurer to pay Michigan level PIP benefits is only triggered when the insurer voluntarily adds its name to Michigan’s Certification List. This submission would appear to fly in the face of a plain reading of the preamble to subsection 59(4) of the Ontario SABS that “For the purpose of this section, a person is insured in the jurisdiction in which the accident occurred” (my emphasis added).
[10] Further, I do not see any effort by Ontario to legislate beyond its borders or jurisdiction. To the contrary, it is an attempt to recognize the balance necessary where Ontario residents insured under policies issued in Ontario by insurers conducting business in Ontario have claims arising from accidents that occurred in other jurisdictions in Canada and the United States of America. This is in accord with the principles set out in Unifund Assurance Co. of Canada v. Insurance Corp. of British Columbia, 2003 SCC 40 (at paragraphs 12 and 50). Those principles were recognized in Royal & Sunalliance Insurance Co. of Canada v. Wawanesa Mutual Insurance Co., 2006 CanLII 42663 (ON SC), [2006] O.J. No. 5131 (at paragraphs 14 and 15).
[11] It is relevant to review under what circumstances the matter comes before this court. The Arbitration Agreement signed by both insurers cites Section 275(4) of the Insurance Act, R.S.O. 1990 c.I.8 which provides for arbitration where the “insurers are unable to agree with respect to indemnification under this section”. That section of the Insurance Act, supra is known to Ontario motor vehicle insurers as “loss transfer” and applies where the classes (or size) of vehicles involved in accidents giving rise to the payment of SABS permits recovery by one insurer from another. It is certainly open to argument whether that set of circumstances arises here. Regardless, that section provides for the dispute to be resolved by private arbitration conducted under the Arbitration Act, S.O. 1991, c. 17 as occurred here.
[12] The alternative authority for insurers to resolve disputes between themselves about the payment of accident benefits arises in O. Reg 283/95 which is entitled “Disputes Between Insurers”. It includes the process Allstate followed in giving notice of its dispute to TD Home as to which insurer was in priority to pay Dustin Grondin his automobile accident benefits. Section 7 of that regulation provides for the same process, a private arbitration under Arbitration Act, supra, to resolve such disputes. As a result, I accept that this dispute is properly before this court.
Analysis
[13] I would summarize the decision of Arbitrator Fred Sampliner concluding Allstate was entitled to be reimbursed as follows:
a) TD Home’s position undermines the unilateral right of an insured to elect the benefits available in the jurisdiction where the accident injuries occurred and as provided for in the SABS;
b) If TD Home’s position was accepted by adjudicative decisions, Ontario motor vehicle insurers would be encouraged to reduce the scope of coverage provided for in the SABS;
c) TD Home’s position increases the complexity of determining elections by requiring assessment of foreign jurisdiction regimes reducing the efficiency of the process and likely resulting in more disputes between insurers and their insureds; and
d) TD Home’s position that it is not required to pay Dustin Grondin Michigan level PIP benefits should be rejected to give wider and easier to understand coverage to residents of Ontario with automobile policies. In this regard, as was Arbitrator Sampliner, I was provided with copies of the results of Dustin Grondin’s License Appeal Tribunal application seeking Michigan level PIP benefits from TD Home which was rejected both at the Dispute Resolution stage, reasons dated November 22, 2017 and on Reconsideration, reasons dated June 13, 2018. (I make no comment on the correctness of those decisions beyond what I have stated above).
[14] The standard of review, was recently reviewed in Canada (Minister of Citizenship Immigration) v. Vavilov, 2019 SCC 65 and for administrative decisions that the test is presumptively reasonableness with some exceptions.
[15] It does not appear that decision alters the comments of the Court of Appeal in Intact Insurance Company v. Allstate Insurance Company of Canada, 2016 ONCA 609 (at paragraph 53) which stated appeals from insurance arbitration decisions “will engage questions of mixed fact and law that must be reviewed for reasonableness”. The exceptions to apply the correctness standard of review would be ones of “jurisdiction, a constitutional question or a general question of law that is both of central importance to the legal system as a whole and outside the adjudicator’s specialized area or expertise”.
[16] To that end, I would frame the issue before me to be whether the Arbitrator had authority to reach the decision made and, if so, whether that decision should be assessed at the level of reasonableness or correctness.
[17] I do so in order to respond to the position by Allstate that it was legally required to provide Dustin Grondin automobile accident benefits at the Michigan PIP level. As a result, it would be unfair to deny it recovery. This is exacerbated by its relatively prompt notice to TD Home of its position regarding priority and the modest delay by TD Home in accepting priority resulting in the additional payments of benefits which is the subject matter of this dispute.
[18] The answer to whether the Arbitrator had the authority to make the order that he made arises from the Arbitration Agreement entered into between the parties. Fortunately, whether properly commenced under Section 275 of the Insurance Act, supra or O. Reg 283/95, the result is the same. That is, the Arbitration Act, supra, applies. Section 31 of that statute states the decision maker “shall decide a dispute in accordance with law, including equity”. This results in it being within the power of the arbitrator to order the repayment of benefits Allstate was obligated to pay and TD Home submits it was not.
[19] I conclude the test is reasonableness returning to Intact Insurance Company v. Allstate Insurance Company of Canada, supra (at paragraph 53) that even “an extricable question of law regarding SABS, a reasonableness standard of review will still generally apply”.
[20] I am reinforced in this conclusion by clause 2 of the Arbitration Agreement between the insurers which granted the Arbitrator “power to grant any and all relief appropriate to the facts and circumstances that would be within the powers and jurisdiction of a judge of the Ontario Superior Court of Justice at a trial”.
[21] I agree with the reasons and conclusion of the Arbitrator noting:
a) allowing Allstate to recover the benefits it was obliged to pay is in accordance with the plain wording of Section 59 of the SABS which offers the insured a choice of benefits to be received is equitable and it ought not to be denied full recovery of amounts it was required to pay;
b) to conclude otherwise would serve to discourage accidents benefit insurers from prompt and fair payment of benefits to which the insured is entitled at the time such benefits can expect to be most required; and
c) the exposure to repayment of benefits by the priority insurer that it might claim to not directly be responsible to pay encourages the priority insurer to determine its position as quickly and efficiently as possible.
Disposition
[22] The appeal is dismissed. Counsel advised they had agreed on costs in the amount of $6,000.00 inclusive of fees, and HST and disbursements and same is payable by TD Home to Allstate.
Mr. Justice G. Dow
Released: December 17, 2020
COURT FILE NO.: CV-19-00623482-0000
DATE: 20201217
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ALLSTATE INSURANCE COMPANY OF CANADA
Applicant (Respondent)
– and –
TD HOME & AUTO INSURANCE COMPANY
Respondent (Appellant)
REASONS FOR DECISION
Mr. Justice G. Dow
Released: December 17, 2020